What changed in this filing

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Item 1. Financial Statements

2021-11-09 compared with 2021-08-12 · 246 added, 216 removed, 468 unchanged (50% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

As of June 30,

As of September 30,

As of December 31,

2 unchanged sentences

Restricted cash

counts receivable

Accounts receivable

Marketable securities

Prepaid expenses and other current assets

2 unchanged sentences

Restricted cash, noncurrent

Operating lease

Operating lease right-of-use

Liabilities and Stockholders’ Equity

15 unchanged sentences

Preferred stock, par value $ 0.001 :

2,000,000 shares authorized and 0 issued and outstanding as of June 30, 2021 and December 31, 2020

2,000,000 shares authorized and 0 issued and outstanding as of September 30, 2021 and December 31, 2020

Common stock, $ 0.001 par value:

20,000,000 Class A shares authorized as of June 30, 2021 and December 31, 2020;

1,855,143 shares issued and outstanding as of June 30, 2021, and 1,542,058 shares issued and outstanding as of

December 31, 2020;

2,700,000 Class B shares authorized as of June 30, 2021 and December 31, 2020;

80,430 shares issued

and outstanding as of June 30, and 249,077 shares issued and outstanding as of December 31, 2020;

and 1,005 Class F

shares authorized, issued, and outstanding as of June 30, 2021 and December 31, 2020

Accumulated other comprehensive income (loss)

20,000,000 Class A shares authorized as of September 30, 2021 and December 31, 2020;

1,900,441 shares issued and outstanding as of September 30, 2021, and 1,542,058 shares issued and outstanding as of December 31, 2020;

2,700,000 Class B shares authorized as of September 30, 2021 and December 31, 2020;

89,672 shares issued and outstanding as of September 30, 2021, and 249,077 shares issued and outstanding as of December 31, 2020;

and 1,005 Class F shares authorized, issued, and outstanding as of September 30, 2021 and December 31, 2020

Additional paid-in

Accumulated other comprehensive loss

Accumulated deficit

3 unchanged sentences

Total liabilities and stockholders’ equity

Deferred revenue as of June 30, 2021 and December 31, 2020 includes $ 53.2 million and $ 68.2 million, respectively, from Palantir Technologies Japan, K.K.

Deferred revenue as of September 30, 2021 and December 31, 2020 includes $ 38.6 million and $ 68.2 million, respectively, from Palantir Technologies Japan, K.K.

Equity Method Investments

4 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Cost of revenue

13 unchanged sentences

Net loss per share attributable to common stockholders, diluted

Weighted-average shares of common stock outstanding used in computing net loss per share attributable to

common stockholders, basic

Weighted-average shares of common stock outstanding used in computing net loss per share attributable to

common stockholders, diluted

Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, basic

Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, diluted

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

Other comprehensive income:

Three Months Ended September 30,

Nine Months Ended September 30,

Other comprehensive income (loss):

Foreign currency translation adjustments

7 unchanged sentences

Stockholders’

Balance as of March 31, 2021

Balance as of June 30, 2021

Issuance of common stock from the exercise of stock options

Issuance of common stock upon vesting of restricted stock units (“RSUs”)

Issuance of common stock upon net exercise of common stock warrants and other

Stock-based compensation

Other comprehensive loss

Balance as of June 30, 2021

Balance as of September 30, 2021

Comprehensive

8 unchanged sentences

Other comprehensive income

Balance as of June 30, 2021

Balance as of September 30, 2021

Palantir Technologies Inc.

4 unchanged sentences

Convertible Preferred

Treasury Stock

Comprehensive

Stockholders’

Balance as of March 31, 2020

Issuance of Series K convertible preferred stock

Issuance of common stock from the exercise of stock options

Balance as of June 30, 2020

( 3,963,692 )

( 1,398,701 )

Issuance of Series D preferred stock upon net exercise of Series D preferred stock warrants

Issuance of common stock upon net exercise of common stock warrants

Issuance of common stock, net of issuance costs

Retirement of treasury stock

Conversion of redeemable convertible preferred stock to common stock

Conversion of convertible preferred stock to common stock

( 2,105,319 )

Conversion of preferred stock warrants to common stock warrants

Issuance of common stock from the exercise of stock options

Issuance of common stock upon vesting of restricted stock units

Stock-based compensation

Settlement of employee loan accounted for as a modification to stock option

Other comprehensive income

Balance as of June 30, 2020

Balance as of September 30, 2020

( 4,817,011 )

Palantir Technologies Inc.

Condensed Consolidated Statements of Redeemable Convertible and Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands)

Redeemable Convertible

5 unchanged sentences

Stockholders’

Equity (Deficit)

Balance as of December 31, 2019

( 3,798,963 )

( 1,980,642 )

Conversion of Series H-1

1 unchanged sentence

Issuance of Series K convertible preferred stock

Issuance of Series D preferred stock upon net exercise of Series D preferred stock warrants

Repurchase of common stock, held in treasury

Issuance of common stock from the exercise of stock options

Issuance of common stock, net of issuance costs

Retirement of treasury stock

Issuance of common stock upon net exercise of common stock warrants

Issuance of common stock, net of issuance costs

Conversion of redeemable convertible preferred stock to common stock

Conversion of convertible preferred stock to common stock

( 2,105,319 )

Conversion of preferred stock warrants to common stock warrants

Issuance of common stock from the exercise of stock options

Issuance of common stock upon vesting of RSUs

Stock-based compensation

Settlement of employee loan accounted for as a modification to stock option

Other comprehensive income

Balance as of June 30, 2020

( 1,018,048 )

Balance as of September 30, 2020

( 4,817,011 )

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities

2 unchanged sentences

Stock-based compensation

Change in fair value of warrants

operating lease expense

Unrealized loss from marketable securities

Other operating activities

11 unchanged sentences

Purchases of property and equipment

Proceeds from the sale of assets held for sale

Purchases of marketable securities

Purchases of alternative investments

Other investing activities

Net cash used in investing activities

16 unchanged sentences

investing and financing information:

Common stock issuance costs included in accounts payable and accrued liabilities

Conversion of redeemable convertible and convertible preferred stock to common stock

Receivable from the exercise of common stock options included in prepaid expenses and other current assets

Conversion of convertible preferred stock warrants to common stock warrants

Cashless net exercise of warrants for convertible preferred stock

The accompanying notes are an integral part of these condensed consolidated financial statements.

6 unchanged sentences

Basis of Presentation and Consolidation

The accompanying

unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

ly accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting.

The accompanying condensed consolidated financial statements include the accounts of Palantir Technologies Inc.

and its consolidated subsidiaries.

All significant intercompany balances and transactions have been eliminat e

d in consolidation.

Investments in entities where the Company holds at least a 20% ownership interest and has the ability to exercise significant influence over the investee, but d o

es not control, are accounted for using the equity method of accounting.

For such investments, the share of the investee’s results of operations is included as a component of other income (expense), net in the condensed consolidated statements of operations and the investment balance is included in other assets and classified as noncurrent in the condensed consolidated balance sheets.

All significant intercompany balances and transactions have been eliminated in consolidation.

Investments in entities where the Company holds at least a 20 % ownership interest and has the ability to exercise significant influence over the investee, but does not control, are accounted for using the equity method of accounting.

The Company’s fiscal year ends on December 31.

3 unchanged sentences

Leases (Topic 842)

As a result, certain components of cash flows used in operating activities within the Company’s condensed consolidated statements of cash flows for the six months ended June 30, 2020 have been presented to conform to the new standard.

As a result, certain components of cash flows used in operating activities within the Company’s condensed consolidated statements of cash flows for the nine months ended September 30, 2020, have been presented to conform to the new standard.

The impact to the presentation of the other statements was not material.

3 unchanged sentences

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods.

Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to, identification of performance obligations in customer contracts, the valuation of deferred tax assets and uncertain tax positions, collectability of accounts receivable, useful lives of tangible assets, and the incremental borrowing rate for operating leases.

the valuation of deferred tax assets and uncertain tax positions ;

collectability of contract consideration, including accounts receivable ;

useful lives of tangible assets ;

and the incremental borrowing rate for operating leases.

Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that management believes to be reasonable under the circumstances.

Actual results could differ from those estimates and such differences could affect the Company’s financial position and results of operations.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Summary of Significant Accounting Policies

3 unchanged sentences

for the year ended December 31, 2020, which was filed with the SEC on February 26, 2021.

There have been no significant changes to these policies during the six months

ended June 30, 2021.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

There have been no significant changes to these policies during the nine months ended September 30, 2021.

Cash, Cash Equivalents, and Restricted Cash

3 unchanged sentences

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the amounts shown in the condensed consolidated statements of cash flows (in thousands):

As of June 30,

As of September 30,

Cash and cash equivalents

10 unchanged sentences

and charged against an allowance for credit losses when the Company has exhausted collection efforts without success.

Based upon the Company’s assessment as of June 30, 2021 and December 31, 2020, it did no t record an allowance for credit losses as probable losses are not expected to be material.

Based upon the assessment as of September 30, 2021, the Company recorded an immaterial allowance for credit losses.

As of December 31, 2020, the Company did no t record an allowance for credit losses.

Concentrations of Credit Risk and Other Concentrations

instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable.

Cash equivalents primarily consist of money market funds with original maturities of three months or less, which are invested primarily with U.S.

3 unchanged sentences

The Company is exposed to concentrations of credit risk with respect to accounts receivable presented on the condensed consolidated balance sheets.

The Company’s accounts receivable balances as of June 30, 2021 and December 31, 2020 were $ 243.0 million and $ 156.9 million, respectively.

Customer I represented 24 % of total accounts receivable as of June 30, 2021.

The Company’s accounts receivable balances as of September 30, 2021 and December 31, 2020 were $ 174.4 million and $ 156.9 million, respectively.

Customer H represented 11 % of total accounts receivable as of September 30, 2021.

Customer G represented 13 % of total accounts receivable as of December 31, 2020.

No other customer represented more than 10 % of total accounts receivable as of June 30, 2021 and December 31, 2020.

No other customer represented more than 10 % of total accounts receivable as of September 30, 2021 and December 31, 2020.

The Company seeks to mitigate its credit risk with respect to accounts receivable by contracting with large commercial customers and government agencies and regularly monitoring the aging of accounts receivable balances.

As of June 30, 2021 and December 31, 2020, the Company had not experienced any significant losses on its accounts receivable.

For the three and six months ended June 30, 2021, no customer represented more than 10% of total revenue.

For the three and six months ended June 30, 2020, Customer F, which is in the government operating segment, represented 11 % of total revenue and Customer A, which is in the commercial operating segment, represented 10 % of total revenue, respectively.

No other customer represented more than 10 % of total revenue for the three and six months ended June 30, 2020.

As of September 30, 2021 and December 31, 2020, the Company had not experienced any significant losses on its accounts receivable.

For the three and nine months ended September 30, 2021, no customer represented more than 10 % of total revenue.

For the three months ended September 30, 2020, no customer represented more than 10 % of total revenue.

For the nine months ended September 30, 2020, Customer F, which is in the government operating segment, represented 11 % of total revenue.

No other customer represented more than 10 % of total revenue for the three and nine months ended September 30, 2020.

Palantir Technologies Inc.

1 unchanged sentence

The Company relies on the technology, infrastructure, and software applications, including software-as-a-service

offerings, of third parties in order to host or operate certain key products and functions of its

offerings, of third parties in order to host or operate certain key products and functions of its business.

Recently Adopted Accounting Pronouncements

n December 2019, the FASB issued ASU

In December 2019, the FASB issued ASU 2019-12,

Simplifying the Accounting for Income Taxes (Topic 740),

8 unchanged sentences

The Company’s contract liabilities consist of deferred revenue and customer deposits.

As of June 30, 2021 and December 31, 2020, the Company’s contract liability balances were $ 555.5 million and $ 531.9 million, respectively.

Revenue of $ 285.4 million and $ 301.3 million was recognized during the six months ended June 30, 2021 and 2020, respectively, that was included in the contract liability balances as of

December 31, 2020 and 2019, respectively.

As of September 30, 2021 and December 31, 2020, the Company’s contract liability balances were $ 510.3 million and $ 531.9 million, respectively.

Revenue of $ 347.7 million and $ 406.4 million was recognized during the nine months ended September 30, 2021 and 2020, respectively, that was included in the contract liability balances as of December 31, 2020 and 2019, respectively.

Remaining Performance Obligations

The Company’s arrangements

with its customers oft e

n have terms that span over multiple years.

The Company’s arrangements with its customers often have terms that span over multiple years.

However, the Company generally allows its customers to terminate contracts for convenience prior to the end of the stated term with less than twelve months’ notice.

2 unchanged sentences

Cancelable contracted revenue, which includes customer deposits, is not considered a remaining performance obligation.

The Company’s remaining performance obligations were $ 671.9 million as of June 30, 2021, of which the Company expects to recognize approximately 49 % as revenue over the next twelve months.

The Company’s remaining performance obligations were $ 873.9 million as of September 30, 2021, of which the Company expects to recognize approximately 45 % as revenue over the next twelve months.

Disaggregation of Revenue

1 unchanged sentence

for disaggregated revenue by customer segment and geographic region.

Fair Value Measurements

Financial instruments consist of money market funds and certificates of deposit included in cash equivalents and restricted cash, accounts receivable, other assets accounted for at fair value, accounts payable, and accrued liabilities.

money market funds and certificates of deposit are stated at fair value on a recurring basis.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Investments and Fair Value Measurements

Financial instruments consist of money market funds and certificates of deposit included in cash equivalents and restricted cash, accounts receivable, equity securities, other assets accounted for at fair value, accounts payable, and accrued liabilities.

Money market funds, certificates of deposit, and marketable securities are stated at fair value on a recurring basis.

Accounts receivable, accounts payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date.

The following tables present the Company’s assets that are measured at fair value on a recurring and nonrecurring basis and indicates the fair value hierarchy of the valuation (in thousands):

As of June 30, 2021

The following tables present the Company’s assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation (in thousands):

As of September 30, 2021

Money market funds

Certificates of deposit

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Marketable securities

As of December 31, 2020

2 unchanged sentences

Certificates of Deposit

The Company’s Level 2 instruments consist of restricted cash invested in certificates of deposit.

The Company’s Level 2 instruments consist of cash equivalents and restricted cash invested in certificates of deposit.

The fair value of such instruments is estimated based on valuations obtained from third-party pricing services that utilize industry standard valuation models, including both income-based and market-based approaches, for which all significant inputs are observable either directly or indirectly.

These inputs include interest rate curves, foreign exchange rates, and credit ratings.

Gross unrealized gains or losses for cash equivalents as of June 30, 2021 and December 31, 2020 were not material.

Gross unrealized gains or losses on certificate of deposits as of September 30, 2021 and December 31, 2020 were not material.

Marketable Securities

Marketable securities consist of equity securities in publicly-traded companies and are recorded at fair market value each reporting period.

Realized and unrealized gains and losses are recorded in other income (expense), net on the condensed consolidated statements of operations.

During the three and nine months ended September 30, 2021, the Company recorded net unrealized losses of

$ 7.2 million within other income (expense), net on the condensed consolidated statements of operations.

The Company approved and entered into certain agreements (“Investment Agreements”) to purchase, or commit to purchase, as further discussed in Note 8.

Commitments and Contingencies—Investment Commitments,

shares of various entities, including special purpose acquisition companies and/or other privately-held or publicly-traded entities (each, an “Investee,” and such purchases, and commitments to purchase, the “Investments”).

In connection with signing the Investment Agreements, each Investee or an associated entity and the Company entered into a commercial contract for access to the Company’s products and services.

The maximum potential revenue from all of these commercial contracts is $ 640.2 million, which is inclusive of $ 82.9 million of contractual options.

The terms of such contracts, including such contractual options, range

from three to ten years .

The majority of these commercial contracts are subject to various termination provisions, including for convenience in the event a proposed business combination is not completed.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

During 2021, the Company assessed the concurrent agreements under the non-monetary

guidance within Accounting Standards Codification (“ASC”) 606 - Revenue from Contracts with Customers

and the total revenue recognized from the commercial contracts during the three and nine months ended September 30, 2021 was $ 19.0 million and $ 22.0 million, respectively.

The following table presents the details of the investments purchased under such Investment Agreements during the nine months ended September 30, 2021 (in thousands):

Investment Amount

Faraday Future

Roivant Sciences

Sarcos Robotics

Autonomous aerial vehicle company (2)

Investments are in publicly-traded marketable securities, unless otherwise noted.

Investment in privately-held company.

Privately-Held Securities

Equity investments in private-held companies without readily determinable fair values are recorded using the measurement alternative of cost less impairment, if any, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer.

As of September 30, 2021, the carrying value of investments without readily determinable fair values were recorded in other assets in the Company’s condensed consolidated balance sheets and were not material.

Alternative Investments

The Company purchased $ 50.9 million in 100 -ounce

gold bars, which are included within prepaid expenses and other current assets on the condensed consolidated balance sheet.

The investment is initially recorded as cost and is subsequently remeasured at lower of cost or market each reporting period.

The gold bars will initially be kept in a secure third-party facility located in the northeastern United States.

The Company is able to take physical possession of the gold bars stored at the facility at any time with reasonable notice.

Balance Sheet Components

1 unchanged sentence

Property and equipment, net consisted of the following (in thousands):

As of June 30,

As of September 30,

As of December 31,

6 unchanged sentences

Total property and equipment, net

Depreciation and amortization expense related to property and equipment, net was $ 3.1 million and $ 3.2 million for the three months ended June 30, 2021 and 2020, respectively, and $ 6.3 million and $ 6.8 million for the s i

x months ended June 30, 2021 and 2020, respectively.

Depreciation and amortization expense related to property and equipment, net was $ 3.1 million and $ 2.5 million for the three months ended September 30, 2021 and 2020, respectively, and $ 9.3 million and $ 9.3 million for the nine months ended September 30, 2021 and 2020, respectively.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

As of June 30,

As of September 30,

As of December 31,

1 unchanged sentence

Accrued other liabilities

Total accrued liabilitie

Total accrued liabilities

Equity Method Investments

7 unchanged sentences

The Company’s investment in Palantir Japan is accounted for as an equity method investment as the Company is able to exercise significant influence over, but does not control, the investee.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

2014 Credit Facility

In October 2014, the Company entered into an unsecured revolving credit facility which has been subsequently amended (the “2014 Credit Facility”).

The 2014 Credit Facility incurred interest at the London Interbank Offered Rate (“LIBOR”) plus a margin of 2.75 % per annum, subject to certain adjustments, and incurs a commitment fee of 0.375 % assessed on the daily average undrawn p o

rtion of revolving commitments.

Interest and commitment fees are payable at the end of an interest period or at each three-month interval if the interest period is longer than three months.

The 2014 Credit Facility, as amended, matures on June 4, 2023 .

During April 2021, the Company entered into an amendment to the 2014 Credit Facility, which provided for an increase of $ 200.0 million to the revolving commitments of the existing lenders under the 2014 Credit Facility, for total revolving commitments of $ 400.0 million, and which also provided for an incremental loan facility for additional loans in an agg r

egate principal amount of up to $ 100.0 million with one or more existing or new lenders upon mutual agreement between the Company and such lenders.

Upon entering into the amendment, the Company repaid its outstanding term loans of $ 200.0 million.

As of June 30, 2021, the Company had no amounts outstanding under the 2014 Credit Facility and a $ 400.0 million undrawn revolving credit facility.

The 2014 Credit Facility contains customary representations and warranties, and certain financial and nonfinancial covenants, including but not limited to maintaining minimum liquidity of $ 50.0 million, and certain limitations on liens and indebtedness.

The Company was in compliance with all covenants associated with the 2014 Credit Facility as of June 30, 2021.

As of September 30, 2021, the Company had no amounts outstanding under the 2014 Credit Facility and a $ 400.0 million undrawn revolving credit facility.

The 2014 Credit Facility contains customary r epresentat

ions and warranties, and certain financial and nonfinancial covenants, including but not limited to maintaining minimum liquidity of $ 50.0 million, and certain limitations on liens and indebtedness.

The Company was in compliance with all covenants associated with the 2014 Credit Facility as of September 30, 2021.

Commitments and Contingencies

1 unchanged sentence

In December 2019, the Company entered into, and subsequently amended during December 2020, a minimum annual commitment to purchase cloud hosting services of at least $ 1.49 billion over six contract years, with an optional carryover period through June 30, 2029, in exchange for various discounts on such services.

If the spend does not meet the minimum annual commitment each year or at the end of the term, the Company is obligated to make a return payment.

I f the spend does not meet the minimum annual commitment each year or at the end of the term, the Company is obligated to make a return payment.

If the difference is greater than $30.0 million for each of the first three contract years or $50.0 million for each of the contract years thereafter (“relief amounts”), the Company has the option to pay the respective relief amount for that year for services to be utilized in the future and the excess amount of the difference above the relief amount would be added to the minimum annual commitment of the following year through the end of the contract.

The Company satisfied its $ 126.0 million commitment for the contract year ended June 30, 2021.

The commitment amount for the contract year ended

June 30, 2022 is

$ 167.0 million.

As of September 30, 2021, the Company had satisfied $ 34.0 million of its $ 167.0 million commitment for the contract year ending June 30, 2022.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

In June 2020, the Company entered into an additional commitment to purchase at least $ 45.0 million of cloud hosting services over a period of five years commencing on June 1, 2020 and ending on May 31, 2025.

1 unchanged sentence

The shortfall payment may be applied as a prepayment against consumption during an additional twelve-month coverage period expiring on May 31, 2026, at which time any unused amount would be forfeited.

As of June 30, 2021, the Company had satisfied $ 6.0

million of its commitment.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

As of September 30, 2021, the Company had satisfied $ 8.0 million of its commitment.

Investment Commitments

The Company approved and entered into certain agreements (“Investment Agreements”) to purchase, or commit to purchase, shares of various entities, including special purpose acquisition companies and/or other privately-held or publicly-traded entities (each, an “Investee,” and such purchases, or commitments to purchase, the “Investments”).

As of June 30, 2021, the Company had outstanding commitments, subject to the applicable terms and conditions, to purchase a total of

25.0 million shares for an aggregate purchase price of

$ 250.0 million.

The Company approved and entered into certain Investment Agreements with Investees, as further discussed in Note 4.

Investments and Fair Value Measurements - Investments

As of September 30, 2021, the Company had outstanding investment commitments, subject to the applicable terms and conditions, to purchase a total of 22.7 million shares for an aggregate purchase price of $ 226.5 million.

The closings of certain of such Investments are contingent upon the completion of a proposed business combination between the applicable Investee and other applicable parties.

As of June 30, 2021, none of such Investments had closed.

Additionally, in connection with signing the Investment Agreements, each Investee or an associated entity and the Company entered into a commercial contract for access to the Company’s products and services.

The maximum potential revenue from these commercial contracts is $ 428 million, which is inclusive of $ 73 million from contractual options, and the terms of such contracts, including these contractual options, range from

The majority of these commercial contracts are subject to various termination provisions, including for convenience in the event a proposed business combination is not completed.

The Company assessed the concurrent agreements under the non-monetary

guidance within Accounting Standards Codification (“ASC”)

606 - Revenue from Contracts with Customers

and the total revenue recognized from such

commercial contracts during the three and six months ended June 30, 2021 was

$ 3.0 million.

The following table presents details related to the Company’s investment commitments as of June 30, 2021 (in thousands):

The following table presents details related to the Company’s investment commitments outstanding as of September 30, 2021 (in thousands):

Agreement Date

Investment Amount

March 30, 2021

Sarcos Robotics

April 5, 2021

Roivant Sciences

Celularity (1)(2)

Mobility company (1)

5 unchanged sentences

June 22, 2021

Fast Radius ( 2

July 18, 2021

July 27, 2021

AdTheorent ( 2

July 27, 2021

August 2, 2021

Energy Vault ( 2

September 8, 2021

Electric vehicle charging company ( 2

September 10, 2021

The Company’s investment closed after September 30, 2021.

See further discussion in Note 14.

Subsequent Events

Commercial contract contains termination for convenience clauses in the event the proposed business combination and/or the Company’s proposed investment is not completed.

The Company’s investment closed during July 2021.

Litigation and Legal Proceedings

From time to time, third parties may assert paten t

infringement claims against the Company.

From time to time, third parties may assert patent infringement claims against the Company.

In addition, from time to time, the Company may be subject to other legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, copyrights, and other intellectual property rights;

14 unchanged sentences

The Company is unable to predict whether or when any such matters may arise, the outcome of these matters, or the ultimate legal and financial liability, and cannot reasonably estimate the possible loss or range of loss at this time and accordingly has not accrued a related liability.

On December 14, 2017, members of KT4 Partners LLC (Managing Member Marc Abramowitz) and Sandra Martin Clark, as trustee for the Marc Abramowitz Irrevocable Trust Number 7 (together, “KT4 Plaintiffs”), filed an action in the Delaware Superior Court against the Company and Disruptive Technology Advisers LLC.

The complaint alleges tortious interference with prospective economic advantage and civil conspiracy in connection with a potential sale of stock by the KT4 Plaintiffs to a third party.

The KT4 Plaintiffs seek compensatory and punitive damages, interest,

fees, and costs .

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The complaint alleges tortious interference with prospective economic advantage and civil conspiracy in connection with a potential sale of stock by the KT4 Plaintiffs to a third party.

The KT4 Plaintiffs seek compensatory and punitive damages, interest, fees, and costs.

The Company believes this lawsuit is without merit and is vigorously defending itself against it.

2 unchanged sentences

Accordingly, the Company is unable, at this time, to estimate the overall effects that may result from the lawsuit on its financial condition, results of operations, or cash flows.

As of June 30, 2021, the Company was not aware of any currently pending legal matters or claims, individually or in the aggregate, that were expected to have a material adverse impact on its condensed consolidated financial statements.

As of September 30, 2021, the Company was not aware of any currently pending legal matters or claims, individually or in the aggregate, that were expected to have a material adverse impact on its condensed consolidated financial statements.

Letters of Credit and Guarantees

The Company had irrevocable standby letters of credit and guarantees, including bank guarantees, outstanding in the amounts of $ 98.7 million and $ 116.8 million as of June 30, 2021 and December 31, 2020, respectively, all of which were fully collateralized.

The Company had irrevocable standby letters of credit and guarantees, including bank guarantees, outstanding in the amounts of $ 88.1 million and $ 116.8 million as of September 30, 2021 and December 31, 2020, respectively, all of which were fully collateralized.

The Company is required to maintain these letters of credit and guarantees primarily for operating lease agreements, certain customer contracts, and other guarantees and financing arrangements.

As of June 30, 2021, these letters of credit and guarantees had expiration dates through August 2028.

As of September 30, 2021, these letters of credit and guarantees had expiration dates through August 2028.

Warranties and Indemnification

5 unchanged sentences

Due to the absence of historical warranty claims, the Company’s expectations of future claims related to products under warranty continue to be insignificant.

The Company has not recorded warranty expense or related accruals as of June 30, 2021 and December 31, 2020.

The Company has not recorded warranty expense or related accruals as of September 30, 2021 and December 31, 2020.

The Company generally agrees to indemnify its customers against legal claims that the Company’s software products infringe certain third-party intellectual property rights and accounts for its indemnification obligations.

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To date, the Company has not been required to make any payment resulting from infringement claims asserted against its customers and does not believe that the Company will be liable for such claims in the foreseeable future.

As such, the Company has not recorded a liability for infringement costs as of June 30, 2021 and December 31, 2020.

As such, the Company has not recorded a liability for infringement costs as of September 30, 2021 and December 31, 2020.

The Company has obligations under certain circumstances to indemnify each of the defendant directors and certain officers against judgments, fines, settlements, and expenses related to claims against such directors and certain officers and otherwise to the fullest extent permitted under the law and the Company’s bylaws and Amended and Restated Certificate of Incorporation.

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The Class F common stock has the voting rights generally described below and each share of Class F common stock is convertible at any time, at the option of the holder thereof, into one share of Class B common stock.

All shares of Class F common stock are held in a voting trust established by Stephen Cohen, Alexander Karp, and Peter Thiel ( the

The Class F common stock generally gives the Founders the ability to control up to 49.999999 % of the total voting power of the Company’s capital stock, so long as the Founders and certain of their affiliates collectively meet a minimum ownership threshold, which was 100.0 million of the Company’s equity securities as of June 30, 2021.

Holders of common stock are entitled to dividends when, as and if declared by the Company’s Board of Directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends.

No dividends have been declared as of June 30, 2021.

In connection with the Company’s direct listing of its Class A common stock on the New York Stock Exchange (“Direct Listing”) in September 2020, all outstanding shares of redeemable convertible preferred stock and convertible preferred stock were converted into 4,017,378 and 793,725,807 shares of Class B common stock, respectively, and 1,005,000 shares of Class B common stock held by the Founders were exchanged for an equal number of shares of

Class F common stock.

All shares of Class F common stock are held in a voting trust established by Stephen Cohen, Alexander Karp, and Peter Thiel (the “Founders”).

The Class F common stock generally gives the Founders the ability to control up to 49.999999 % of the total voting power of the Company’s capital stock, so long as the Founders and certain of their affiliates collectively meet a minimum ownership threshold, which was 100 million of the Company’s equity securities as of September 30, 2021.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

No dividends have been declared as of September 30, 2021.

The following represented the total authorized, issued, and outstanding shares for each class of common stock (in thousands):

As of June 30, 2021

As of September 30, 2021

As of December 31, 2020

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Stock Options

The following table summarizes stock option activity for the six months ended June 30, 2021 (in thousands, except per share amounts):

The following table summarizes stock option activity for the nine months ended September 30, 2021 (in thousands, except per share amounts):

Exercise Price

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Options canceled and forfeited

Balance as of June 30, 2021

Options vested and exercisable as of June 30, 2021

As of June 30, 2021, the unrecognized expense related to options outstanding was $ 1.0 billion, which is expected to be recognized over a weighted-average service period of 8.07 years.

The following table summarizes the RSU activity for the six months ended June 30, 2021 (in thousands, except per share amounts):

Balance as of September 30, 2021

Options vested and exercisable as of September 30, 2021

As of September 30, 2021, the unrecognized expense related to options outstanding was $ 940.0 million, which is expected to be recognized over a weighted-average service period of eight years .

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The following table summarizes the RSU activity for the nine months ended September 30, 2021 (in thousands, except per share amounts):

Weighted Average

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RSUs canceled

Unvested and outstanding as of June 30, 2021

As of June 30, 2021, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 815.0 million, which the Company expects to recognize over 3.20 years.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Unvested and outstanding as of September 30, 2021

As of September 30, 2021, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $ 985.1 million, which the

Company expects to recognize over three years .

In May 2019, the Company granted growth units which vest upon the satisfaction of both a performance-based vesting condition, which was satisfied upon the Company’s Direct Listing, and a service-based vesting condition, which was satisfied in March 2021.

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Total stock-based compensation expense was as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Cost of revenue

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Total stock-based compensation expense (1)

The Company recorded a benefit for income taxes of

$ 5.7 million and a provision for income taxes of $ 0.9 million for the three months ended June 30, 2021 and 2020, respectively, and a benefit for income taxes of

$ 2.6 million and a provision for income taxes of

$ 3.5 million for the six months ended June 30, 2021 and 2020, respectively.

On September 30, 2020, in connection with the Direct Listing, the Company incurred $ 769.5 million and $ 8.4 million of stock-based compensation using the accelerated attribution method related to the satisfaction of the performance-based vesting condition for RSUs and growth units, respectively, that had satisfied the service-based vesting condition as of such date.

The Company recorded a provision for income taxes of $ 1.4 million and a benefit from

income taxes of $ 8.5 million for the three months ended September 30, 2021 and 2020, respectively, and a

income taxes of $ 1.1 million and $ 5.0 million for the nine months ended September 30, 2021 and 2020, respectively.

The Company is subject to income tax in the U.S.

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statutory rate primarily due to the valuation allowance recorded on its losses from the U.S.

and other jurisdictions, foreign income taxed at different rates, non-deductible of stock-based compensation and the revaluation of its United Kingdom (“UK”) deferred tax assets as a result of a change in the UK corporate tax rate enacted during the current quarter, which increase d

the rate from 19 % to 25 % and will be effective April 1, 2023.

and other jurisdictions, foreign income taxed at different rates, non-deductible

stock-based compensation and the revaluation of its United Kingdom (“UK”) deferred tax assets as a result of a change in the UK corporate tax rate enacted during the second quarter of 2021, which increased the rate from 19 % to 25 % effective April 1, 2023.

The realization of deferred tax assets is dependent upon the generation of sufficient taxable income of the appropriate character in future periods.

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federal and state deferred tax assets will not be fully realized.

Accordingly, the Company has maintained a valuation allowance

federal and state

deferred tax assets.

Accordingly, the Company has maintained a valuation allowance on its U.S.

federal and state deferred tax assets.

Palantir Technologies Inc.

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Net loss attributable to common stockholders

Change in fair value attributable to participating securities

Net loss attributable to common stockholders, for diluted net

loss per share

Net loss attributable to common stockholders, for diluted net loss per share

Weighted-average shares used in computing net loss per share, basic

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The following outstanding potentially dilutive common stock equivalents have been excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented due to their anti-dilutive effect (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Redeemable convertible preferred stock

Convertible preferred stock

Warrants to purchase redeemable convertible and convertible

As of September 30,

Warrants to purchase common stock

Options and SARs issued and outstanding

Options and Stock Appreciation Rights issued and outstanding

RSUs outstanding

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Notes to Unaudited Condensed Consolidated Financial Statements

Financial information for each reportable segment was as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Financial information for each reportable segment was as

follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Total revenue

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Contribution:

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The reconciliation of contribution to loss from operations is as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Loss from operations

( 1,017,107 )

Research and development expenses (1)

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Revenue is as follows (in thousands, except percentages):

Three Months Ended June 30,

Three Months Ended September 30,

United States

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Total revenue

No other country represents

or more of total revenue for the three months ended June 30, 2021 or 2020.

No other country represents 10 % or more of total revenue for the three months ended September 30, 2021 or 2020.

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Six Months Ended June 30,

Nine Months Ended September 30,

United States

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Total revenue

other country represents 10 % or more of total revenue for the six months ended June 30, 2021 or 2020.

No other country represents 10 % or more of total revenue for the nine months ended September 30, 2021 or 2020.

Subsequent Events

Investment Commitments and Investments

The Company approved and entered into additional Investment Agreements from July 1, 202

1 through the date of this filing.

As of the date of this filing, the Company had additional outstanding investment commitments, subject to applicable terms and conditions, to purchase a total of

million shares for an aggregate purchase price of $

The closings of certain of such Investments are contingent upon the completion of a proposed business combination between the applicable Investee and other applicable parties.

The following table presents details regarding such additional investment commitments outstanding as of the date of this filing (in thousands):

The Company approved and entered into additional Investment Agreements from October 1, 2021 through the date of this filing.

As of the date of this filing, the Company had additional outstanding investment commitments, subject to applicable terms and conditions, to purchase a total of 2.6 million shares for an aggregate purchase price of $ 26.0 million.

The following table presents details regarding the Company’s additional investment commitments outstanding as of the date of this filing (in thousands):

Investment Agreement

Investment Amount

July 18, 2021

July 27, 2021

August 2, 2021

Commercial contract contains termination for c onvenience

clauses in the event the proposed business combination and/or the Company’s proposed investment is not completed .

Additionally, during July 1, 2021 through the date of this filing, the Company purchased

9.0 million shares for an aggregate purchase price of $

53.0 million, as set forth in the following table (in thousands):

Telecommunications company (1)

October 6, 2021

Rigetti & Co, Inc.

October 6, 2021

Commercial contract contains termination for convenience clauses in the event the proposed business combination and/or the Company’s proposed investment is not completed.

In connection with signing each of the Investment Agreements entered into between October 1, 2021 and the date of this filing, each Investee or an associated entity and the Company entered into a commercial contract for the Company’s products and services.

The maximum potential revenue from these commercial contracts, including option years, is $ 26.0 million, and the terms of such agreements range from three to four years .

Additionally, from October 1 to the date of this filing, the Company purchased 5.5 million shares for an aggregate purchase price of $ 55.0 million, as set forth in the following table (in thousands):

Investment Amount

Celularity (1)

Electric vehicle company

Autonomous aerial vehicle company

Reflected as commitment in Footnote 8.

Babylon Health (1)

Mobility company (1)

Reflected as commitments in Note 8.

Commitments and Contingencies

as of June 30, 2021 .

Palantir Technologies Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

In connection with the signing of the Investment Agreements entered into between July 1, 2021 and the date of this filing, each Investee or an associated entity and the Company

entered into a commercial contract for the Company’s products and services.

The maximum potential revenue from these commercial contracts is

$ 162 million, and the terms of such contracts rang

e from four to

The majority of these commercial contracts are subject to various termination provisions, including for convenience in the event a proposed business combination is not completed.

Investment in Gold

During August 2021, the Company purchased $ 50.7 million in 100 -ounce gold bars.

Such purchase will initially be kept in a secure third-party facility located in the northeastern United States and the Company is able to take physical possession of the gold bars stored at the facility at any time with reasonable notice.

- Investment Commitments

as of September 30, 2021.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements